Woolwich can bank on `yes' vote

Most of the 2.57 million members of Woolwich Building Society are expected to vote "yes" to its plans to convert to a bank at its special general meeting tomorrow, clearing the way for share handouts worth an average of pounds 1,233.

While some dissenting voices will be heard at the meeting in the London Arena, their "no" votes are unlikely to derail the pounds 3bn flotation from its July 7 timetable. Most members are expected to have voted by post already, although the number will not be known until tomorrow as Woolwich has not asked its adjudicator for a progress report. "We've decided to leave the whole thing independent," a spokesman said.

Halifax's 9 million members will vote on its flotation plans in a fortnight's time. Last month Alliance & Leicester's members voted in favour of their society's flotation.

At least 20 per cent of Woolwich's investing members must vote and at least 75 per cent of those must vote in favour. For borrowing members a 50 per cent vote in favour is required, the spokesman said.

Peter Budek, leader of the Woolwich Action Group based in Bedford, has pledged to vote against the planned stock market flotation. But, he admitted to being "disheartened" and "disappointed".

"There's little one can do to change the flow," Mr Budek said.

He argues that Woolwich plc is likely to shut down unprofitable branches and raise interest rates for mortgages.

The "bribe" of free shares is more influential, though. Each qualifying member receives a basic distribution of 450 free shares and investors of two years' standing get an additional distribution of up to 2,000 more shares depending on the balance in their accounts on key dates.

Schroders, the investment bank advising Woolwich, and BZW, the stockbroker to the flotation, estimate Woolwich would have had a market capitalisation of between pounds 2.96bn and pounds 3.38bn had the conversion happened on 20 December 1996.

This implies a price per share of between 175p and 200p which gives a mid-price of 187.5p. At that price, the basic distribution is worth pounds 844.